>> Live from San Francisco. Its The Cube. Covering IBM Think 2019. Brought to you by, IBM. >> Okay, welcome back everyone, live here in The Cube here in San Francisco, exclusive coverage of IBM Think 2019. I'm John Furrier and Stu meeting next guest is Calline Sanchez, Vice President of IBM Systems Labs Services. New role for you, welcome back to the cube. >> Yes. Thank you for asking me back. >> So the new role, Vice President of the Systems Lab Services. Sounds super cool, sounds like you got a little lab in there, a little experimentation >> yeah think of it as a sandbox for geeks worldwide. And what that means is we enable high performance computing deployments as well as what we do with blockchain and also artificial intelligence. >> So its a play ground for people that want to do some big things, solve big problems, what are some of the things that you offer, just take us through how it works. Do I just jump in online, is it a physical location? What's it like ? In 2018 9000 plus engagements worldwide in 123 countries. So to net it out is, it's not necessarily a single lab or a single garage, we have multiple locations and skills worldwide to enable these engagements. >> How big is the organization roughly? Its over a thousand folks, consultants who are smart and capable. >> We had a conversation yesterday with Jamie Thomas, talking about, from a super computer stand point, now IBM's reclaimed the top couple of positions there and from a research stand point, David Floyer from our team has been talking for years about how HPC architectures are really going to permeate what happens in the industry and I think about distributed architectures, it all seems to go back to what people in the HPC environment lived in. You've got background in that, you worked for one of the big labs, explain how this has come from something some government lab used to do to something that now many more companies around the globe are leveraging. >> Before IBM I worked at Sandia National Laboratories and the reason why I chose to work with these awesome skills worldwide in lab services is that I wanted to be part of the cool group, so to speak. So they were doing work in deployments with Oak Ridge National Laboratories and also Laurence Lilvermore. So you'll hear (inaudible) with Laurence Livermore speak on stage about some of the relevance associated with high performance computing and why were number 1. So, to get to our question it's cool to be back online with what I could say, high performance computing deployment. We are the mechanics so to speak in this organization. Similar to what we do with formula 1, people who put on the tires, add the air and also enable the cars to move around. Well without them, guess what? Things don't move around. >> So you guys work on the high performance systems, you got quantum coming around the corner, you got AI front and center so you guys are like the hot shots. You come in, you build solutions with what's in the tool chest, if you will with IBM, is that right ? >> correct You're 100% correct. I will say it in my mind, we make things real. We deploy and implement strategic technologies worldwide for the benefit of our end users and we do that also with our partners. >> Give an example of an engagement you guys have had that's notable, that's worth sharing. >> Recently, this was a really exciting area a Smarter Cities with Kazakhstan. And so heres this independent city that works on basically AI for filming things whether its a security thing recognizing certain faces, deployments associated with weapons etc. And they were able to secure safety based on the film, films that they've taken, those assets. Now the other aspect is managing safer traffic. So even the president of Kazakhstan felt it was extremely relevant that we helped him deploy and he comes back to one of our European leaders saying, hey we need more of this and we want it to be extensive, we want to scale this opportunity. >> Talk about the philosophy's you guys are deploying because it sounds like its a... you said sandbox, when I think sandbox I think you do prototypes, I'm thinking about cool stuff, building solutions and that kind of brings this whole entrepreneurial creation mindset. Do you guys have like a design thinking methodology, is there things you're bringing to the table what else is involved besides the sandbox? >> You are correct. We have a very key component of design thinking. There's a CTO that reports to me directly who leads our overall design thinking and so that's a key component of what we do worldwide. Now as far as... We also enable incubation of technologies. So it's like what we intend to do with IBM Cube, What we intend to do with blockchain on system Z. So with these things we have garages worldwide to deploy or incubate the technology. >> What's the coolest thing you've worked on so far? Or the team's worked on? >> That's really hard to say 'cause there's so much. >> It's like picking a favorite child. >> Yeah, it's like I have way too many. So I was - >> You mention blockchain. I like blockchain. Blockchain, are you in healthcare, is it more, is there certain industries that are popping out for you guys? >> So healthcare is an example but I have seen it in the telecom area as well as other industries in general. So we have 11 industries in which we serve. >> How about AI? We're always trying to understand where customers are, how they're really moving things forward, to understand that that HPC architecture is a foundational layer for many customers to help deploy AI. Where are customers starting to make progress ? Give us some of the vibe you're feeling from customers out there. >> So its exciting with AI right now because we have Power Vision that allows us as any of us to actually exploit, utilize and play with, so to speak. So from my perspective that is what's nice, is that you can enable opportunities with the consumer market and learn. Similar to what we do with, and for instance, I am jumping around here, IMB Cube. Where users can actually become a user and start evaluating algorithms in order to enable this really amazing technology as in IB Cube. >> That was always the promise of big date, is that we should be able to leverage our data and get the average business user to do it. So it sounds like AI will continue that trend. >> Correct. So in prior rule, I talked to all of you about big data storage, right and replication. So now what's amazing about the conversations is that they've transcended. Its like, here you're looking to manage these large data warehouses, when, what do you do with the data? How's it monetized, how is it used in order to solution what's possible. >> What is the goal of the organization, next 6 months, year, what's the charter, what's your key performance indicators, how do you guys measure success, client engagements, onboarding people, what is the business objectives? >> So we look at the number of engagements, we also look at educational services worldwide for instance I will be in Cairo, Egypt next week to work on specific things that are going on in Mia in order to enable this next growth market so to speak. What in addition we do to measure ourselves, utilization, classic services organization view of the world. So we also evaluate what we can do with revenue, profit and our understanding of growth and we really believe the focus is these growth technologies. >> Is there a criteria if I wanted to get involved, just say I am a customer, prospect, wow, I really want to get into this design thinking, got these labs, coolest labs services, I want to play with the cutting edge technologies, how do I get involved? Is there a criteria open to all or how does it work? >> In addition to IBM Systems Labs Services, I have technical universities and we actually run technical universities worldwide for end users, clients as well as what we do with partners and IBMers. And this is important because we're able to then discuss, talk, collaborate with SME's across multiple areas of technology. So its a very good question and very important that I mention the technical universities. >> Are there certifications along that line? What are some of the hot skill sets that people are looking to learn about ? >> It circles right back to your last question, AI. With regards to how we certify folks as well as we, in essence, they get enough training in boot camps in order to get badges. >> So their certification, they just pass the touring test and then they're okay. >> correct. Well. (laughs) I don't know about the touring test so to speak. >> So is there a website on IBM.com, is there like a URL as in like labservices.ibm.com? >> I personally like the look at twitter where you can do a search on IBM Lab Services or Tech U. >> Tech U. And screening, how big is that focus, used a lot of video, is it collaborative tooling is it face to face, virtual, how do you guys do the training, all the above? >> Unfair, I was going to say all of the above. (laughs) It depends. (laughs) Giving that classic response, our favorite is video blogs. What we can do in social media with the YouTube channels etc. to get our opinions or our voice out with regards to key technologies. >> Well great, make sure you let us know what those channels are and we'll promote them, get that metadata out there, of course The Cube loves to collaborate. And thanks for coming on and sharing. >> I appreciate it and I will definitely take a sticker and put it on my laptop. >> Calline Sanchez, Vice President of the new IBM Systems Lab Services. A lot of opportunities to get in the worldwide sandbox and put the sluices together from blockchain to cutting edge AI. Your live coverage here at San Francisco at IBM Think, I'm (inaudible) stay with us for more coverage after this short break. (lively music)

(upbeat digital music) >> Hi, welcome to a CUBE conversation with Wikibon. I'm Peter Burris, the chief research officer of Wikibon and our goal with these CUBE conversations is try to bring you some of the finest minds in the technology industry to try to talk about some of the most pressing problems facing digital businesses as they transform in an increasingly chaotic world. We're very lucky today to have a couple of great thinkers, both from IBM. Ed Walsh is the general manager of storage at IBM and Eric Herzog runs product management for the storage group at IBM. Welcome to the CUBE conversation today. >> It's always nice, thank you for having us. >> So, guys you've been running around Silicon Valley today telling your story, we've got a couple of questions. Wikibon likes to talk about the relationship between data and digital business. A lot of people will wonder what digital business is. We say that the difference between digital business and business is how do you use your data assets. Now, that's a stance that I think is becoming a little bit more vogue in the market place today, but that means that storage has a slightly different role to play when we think about how we protect, secure, sustain those data assets. Do you subscribe to this? Is that how you're looking at it? And is that relevant to the conversation that you're having with customers? >> I haven't heard of that way, but it actually makes a lot of sense and you can jump in as well Eric, but I would say, however you look at your data, if a digital business is leveraging their data it makes a lot of sense. We use different, I would say metaphors, one would be your data assets are your oil, he who refines it gets value, so if you get insights from it. So, if you're not using that, you are kind of putting yourself at a disadvantage. We also see a lot of what I'll say is established companies getting disrupted by you know, true disrupters using the technology and insights of data to disrupt incumbency. You know, we'll call the Uber of my business, it's almost like a verb these days, is disrupting me, they're using technology against me, so, the key thing, the best defense is actually using technology, getting insights and then driving new business. But data alone, you need the right infrastructure, either on prem or in the cloud and put the right analytics and insight to it. So, I would agree completely and I would also say, you know, well, think about it, eighty per cent of data is behind your data, you know, it's not searchable by the web, it's how to leverage your data assets in combination with other things to get true insights. Outside data, different things on AI and really get true insights then map them into your business. So, I would agree with that, I haven't heard that way but I would agree with that, it's a good definition of digital business. >> Well, what we're seeing is for companies that are really leveraging the data, it's their life blood and the issue is data is not small anymore, it's oceans of data. Whether that be things from the Internet of Things, grabbing things, for example, all the tell-cos have sensors all over all of their assets and they're trying to keep the tell-co up and going. And it doesn't just have to be a giant tell-co, small companies have reams and reams of data, it's an ocean and if they're not mining that ocean, if they're not swimming through that ocean correctly, the next thing you know, the competitor disrupts them and that is their power, it's the ability to harness these oceans of data and use that data in a way that allows them to get competitive advantage. So, people thing of storage as just a way to sort of place your data but storage can be an active part of how you increase the value of that data and gain insights as Ed was pointing out. >> Well, I think, well we totally agree with you by the way, I think it's an important point. In fact, the observation that we've made is the difference between data as fuel, or the reason why it sometimes falls down, or the way I understand it, I don't think it's a decent enough metaphor, is that unlike fuel, data can be reused multiple times. >> Ed: Good point. >> And it makes the whole point that you're bringing up Eric, about the idea that you combine insights from a lot of different places with your data and storage has to play an active role in that process. But it also says something about, the idea of storage as kind of something you put over there, it's standalone, I mean, it used to be we worried about systems integration a lot, now, open systems kind of changed that, we just presumed that it was all going to come together. Now, IBM has been around for a long time and has lived in both worlds. What do you think the role of systems integration is going to be as we think about storage, the need to do a better job at protecting and sustaining our data assets, especially given the speed and uncertainty with which the world is changing and the dependency it has on data these days. >> Ed: You want to take that first? >> Well, let me give you a real time example. One of the things IBM just introduced last week, was a very powerful new mainframe, one of the key tenants of that mainframe, is the ability to secure data end to end, from the day the transaction starts, with no impacts, so, while they're doing transactions, millions and billions of transactions on the server farm, it's encrypted from day one but it eventually ends up on storage and storage has to extend that encryption, so that when you put the data at rest while you're analyzing the data, you've got it encrypted, when you're putting it at rest, it's encrypted, when you pull it back because you've run analytics multiple times, the data is encrypted. Eventually, certain data sets, like take finance, healthcare, does end up on archive. But guess what, it still needs to be encrypted. So, that's an example of how the complete systems integration, from the server, through to primary storage, through the archive, is just one example of how storage plays a critical role in extending everything across this entire matrix of systems integration, not just one point thing, but across an integrated solution and of course in this case, it's secure transactions, it's analysis of incredible amounts of insight and of course with the IBM Z mainframe, is incredible power and speed, yet at the same time, keeping that data safe, while it's doing all the analytics. So, that's a very strong story, but that's just one example of how storage plays a critical role in this complete integration of data, with a full systems infrastructure. >> And maybe I could add to that. So, that's a good example of on prem that also can be hosted in the cloud, but if you think of system integration, you're data is critical, you need access to it to actually do the analytic workload, the cognitive workloads on top of it. It can be on prem or in the cloud or actually split between, so, you do need to know you're relying on your cloud infrastructure to give you that enterprise class, not only performance but availability. But it also matters, but it's no longer you as an individual company putting that together. But it does matter, the infrastructure does matter how they get that performance. Also, you mentioned security and protection, which is where IBM's cloud comes in. >> Well, it's interesting to us that, it's almost natural to expect that the proper cloud companies are going to do deep integration. I mean their talking about going all the way down to FPGAs. As long as they are able to handle or provide, you know, a set of interfaces that are natural and reasonable from an overall workload standpoint. I would expect that we'd see the same type of thing happen in a lot of different on premise systems too. So, the notion of integration, I think you guys agree, is an important trend where it's appropriate and where it's adding value and should not be discounted just because it doesn't comply with some definition of open this, that or the other thing as it has in the past. >> Oh, agreed, yeah, in end systems, especially when you're looking at availability, performance, which you're talking about your asset as being your data and getting insights. If it's just sitting there, it's not very valuable, in fact you could say it's actually exposure, but if you're leveraging it, getting insights and driving your business, it's very valuable, right. So, you just need to make sure the infrastructure has either hyper cloud or in the cloud that allows you to do that, right. But security is becoming more and more a big issue. So, I would agree. >> Well, that raises the next question, so, again, as long as we're focused on the data as the asset and not the underlying hardware as the asset then I think we're in good shape. But it does raise the next question. As we think about converged infrastructure and hyper converge infrastructure and storage, compute, network and other elements coming together successfully, what will be the role of storage in the future? I mean, storage is not just that thing that sits over in there with the data on it. It is playing a much more active role in encryption, in compression, in duplication, in how it prepares data to be used by any number of different applications. How do you foresee the role of storage evolving over the next few years? >> I'm sure I can jump in, do you want to take a shot? >> Well, yeah, I think one of the key things you've got to realize is the role of storage is to sort of offload somethings from the primary CPU. So, for example, if you've got oceans of data, what if we can track all that metadata for you, so when the system or the cloud looked for data, it could search everything whether that was 20 million lung cancer pictures, whether that be MRI, whether that be the old style X-ray. Go back 20 years, if all that metadata is attached then the CPU from a server perspective to run the analytics workloads is offloaded and the storage is performing a valuable function of tracking all of that metadata, so that when the server does its analytics and then has to reiterate several times for example, Watson, IBM Watson, is a very intuitive element that analyzes, learns, analyzes, learns, analyzes and keeps going to get, and it's used in oncology, Watson is used in financial services and so if you could offload that metadata analysis to the storage where it's actually acting almost as if it's a sub compute element and handling that offloading the CPU, then more time is spent with Watson, looking at the financial data, looking at that medical data and storage can become a very valuable resource in this future world of this intense data analytics, the machine learning, the artificial intelligence, that systems are going to provide on premises through a cloud infrastructure storage. That's just one example how storage as an intelligent storage vehicle is offloading things from the CPU or from the cloud onto the storage and helping it become more productive and the data be more valuable that much faster. >> I would agree and I think storage has always been evolving, right. So, storage has gravity, it has value. If you think of storage as where you store data, it's going to change architecturally. You mentioned a hyper converge, you mentioned converge, you mentioned cloud, we talked about what we can do with the mainframe, it's all about how do you get the right accessibility and performance, but it will change. It will change rather dramatically, just think of what's going to go on with, we'll say the traditional, modernizing traditional workload, what you do with VMware, and the arrays are getting much more complex, you can also do software defined arrays which allows you to have just more flexibility and deployment but in the new workloads, where you're looking at high performance data analytics or doing things that you can actually expand out and leverage the cloud, that becomes much more of a software only play, it's still storage. The bits and bytes might be on, it's going to be typically on Flash in my opinion, both on prem or off prem, but how do you move that data? How do you keep accessibility? How do you secure that data? So, how do you make sure you have it in the right place where you can actually get the right performance? And that's where storage is always going to evolve. So, it doesn't matter if it's in this array, in a file system, in what we call a big storage ray, or it's in the cloud, it's about how do you monitor it and manage that through its full life cycle. >> So, it sounds like you're suggesting, and again, I think we agree, is that storage used to be the place where you put stuff, and it's becoming increasingly where you run data related services. Whether those services are associated with security or prepping data or protecting data or moving data as effectively as possible, increasingly the storage resources are becoming the mechanism by which we are handling these strategic data services, is that right? >> Yeah, so, think of it this way, in the old model, storage was somewhat passive, it's a place where you store the data, in the new world model, storage is actually active, it's active in moving the data, in helping analyzing the data like for example in that metadata example I just gave, so, storage is not a passive device any more. Storage is an active element of the entire analytic, machine learning, artificial intelligence process, so you can get real insights. If you just relied on the CPU to do that, not going to happen, so the storage is now an active participant in this end to end solution that extends from on premise into the cloud, as you guys have called it, the true private cloud, >> Right. >> Right, from Wikibon. The storage is active in that versus being just a passive tool, now it's very active and the intelligence, and some of the things we've done with cognitive storage at the IBM site allows the data, like our spectrum scale product, which is heavily involved in giant, hundreds of petabyte analytic workloads today in production in major enterprises across the globe as well as in high performance computer environments, extend from on premise onto cloud, but that storage is active not passive as it was in the old days. >> So, you mentioned cloud, so, we're pretty strong believers in this notion of true private cloud, which is the idea that instead of thinking ultimately about, in the industry that the architecture is going to remove all the data to the cloud, that increasingly, it's going to be moved cloud services down to the data and do things differently and that seems to be, people seem to be, that seems to be resonating with folks. The question that I have then is, when we think about that, where is the data going to be located, that's going to have a major effect on where the workloads actually run? I've had three conversations with three different CIOs in the last six weeks, and they all said, I'm thinking differently and instead of thinking about moving data up to the cloud, I'm now thinking about how do I ensure that I always have control over my data, even if it's running in the cloud because I'm afraid that if I move everything into the cloud, when I do have to bring it back, it's going to be such a huge capital expense, that everybody is going to say no and I can't do it. So, it's almost like, maybe I'll do some stuff in the cloud, but I'll do backup, restore, or have protection on site. What do you think the role of storage is going to be as we think about multi-cloud and being able to do end to end, developing and putting various applications in various places. >> So, you brought up a couple of topics there right, so, your concept and your research on true private cloud actually, I find resonates amazingly well with clients. In fact, a lot of clients are trying to figure out how to leverage cloud, if they have a lot of data on premises and they want to leverage that, so, the way I explain to clients, everyone wants to do everything they can do in the public cloud, all the agility, all the consumption model, all the dev ops models and they just want to do that on premises, so, it's really an agility statement, but then extend to have the right workloads working the right hyper cloud on their demand. But that brings a whole bunch of things. So, the best use case, and now I'll get into the multi-cloud but, the one use case that all of these companies, why did you end up going to Amazon or what not, and then what it gets down to, developers. Developers were able to swipe a credit card or whatever, put their credentials in, swipe a credit card, do one line of code, spin up an environment, one line of code, spin down an environment or they'd boot Chef and Puppet and that would do the API calls, but they are able to do things very quickly. Try that in the enterprise. I mean literally, they would have to go, do a ticket, talk to Joe IT, which they don't want to do, it takes a lot of time, it takes best case about a week, four to five days, and worse case up to three weeks to provision that environment. If you're doing agile development, it literally breaks the process of doing anything agile. So, you're not going to do it, you're forced, you're absolutely forced to go away. So, what we're doing is, we're doing an investment on prem to do exactly, bring the agility, for example, the idea of a swipe our credit card, we have a process, oh, sorry, a software product across, it's an API automation layer, across all of our storage, that gives you the last mile. How do you literally give API templates to your developers that they can literally one line of code, spin it up, one line of code, spin it down, and that works across all our storage devices? But it took investment, and another layer in API automation that the storage team sets up tablets enabled to hey, gold, silver, bronze, provision your own storage, but in the enterprise way, or like a developer, or a gold DBA, hey spin up an environment for a test dev, but what we're able to do is a simple line of code will spin up a system, which could be, let's say, four, five servers, last good snapshot from production that's been data masked the way you need to do it. 'Cause you don't just give developers the whole database. But then literally, that becomes a template that with roll base access again credentials, the developer or Chef or Puppet natively can literally, one line of code, spin up an environment, and one line of code, spin it down. The benefit is, on premises you actually have your data. So, unlike on the, in Amazon, you're spinning things up, spinning things down but it's not really running on what your production data looks like, you're literally able to keep that up to the last night's data or the weekend before, but again with all the data masking. But you can literally show, so, our investment thesis is we need to work on the next level of automation to allow people to truly do everything they can do in the public cloud on private and we're making a lot of investment to do that. So, it's actually one of our biggest investment thesis and it really plays out well as far as clientele. You mentioned the next thing, and you can jump in on both of these, but you also mentioned the next thing is, well, now, a true private cloud allows you to easily extend to these different clouds, well, then how do you keep track of where that is? How do you have, each one of the different clouds will have their own SLAs but how do you manage it? How do you think through security? How do you know you're getting the right SLAs? And where do you put the right things for the right places? And there's management stacks that do that, with software defined storage which all of our products allow you to do, we can run an extension of your device in any of the major public clouds and manage that securely. And I can add a couple more but do you want to jump in. >> Yeah. I think the key thing here is you've got to be able, in a true private cloud, the enterprise is mimicking what an Amazon or IBM cloud division does, right? Except they're doing it in their own walls, on their own premises, now that maybe spread across the world if it's a global enterprise, but it's v will, it's there version of IBM cloud. But they want to be able to burst out. So, all of our software defined storage and even our array storage is designed so that, if they need to move data from on premise to IBM cloud, from on premise to Azure, from on premise to Amazon, they can transparently move that data. In fact, we can set up that they can automatically tier the data, when the data gets cold, boom, they dump it off to IBM cloud. Now, with the data that's in the private cloud on premises if you will, but, a private cloud that they configure, is there for them to use and they take their access out for those, and by the way, talking to the chief security officer and the chief legal officer, they figure out what work loads is it okay to put out there in IBM cloud. And that way they have total control but they have the flexibility of going out to the cloud all done with the storage in an automated fashion. I think the key thing from a true private cloud perspective is storage as well as network and server infrastructure, they want it to be as automated as possible. They had the big town turn at 2008, yes, IT spend is back up, head count is back up, but when you look inside the envelope of head count, there aren't forty storage guys at XYZ Global Enterprise, there is twenty, they are now hired forty people, so, they got forty people back, but the other twenty went to test and dev. They are not doing storage now. So, those twenty guys need to be fully automated to support all these extra developers in a global enterprise and even smaller counts now need that, so the true private cloud, mimics IBM cloud, mimics Azure, mimics Amazon and all those public cloud providers will tell you, they make their business by making sure it's automated, although why is it so, they won't make any money. So, the private cloud does the same thing. >> And those twenty guys are now, as you said earlier, managing oceans of data where the business has no specific visibility in how that data is going to create value in the future. It's an extremely complex arena. So, with that in mind, you guys have been invited to speak to the board of directors of one of the large enterprise clients about the value that storage will play in a digital business, what are some of the things that you tell them? >> So, let me take that one first. >> Sure. >> I think a couple of things. First of all, storage is not passive the way it used to be, you need to think of it as an active element in your cloud strategy to keep your data whole, to keep your data secure and most importantly, to make sure your data offers value. So, for example, you need to use All Flash, why? Well, because it needs to be instantaneous. It needs to connect right into that CPU as fast as possible to suck the data in so you can analyze it and the guys who analyze the data faster, for example, in dark trading and financials, if you're slower, you lose ten million dollars, or a hundred million dollars, so storage is critical in that, so you want to A, let the board of directors know that storage is a critical component, because it's not just passive, you know, like we said before, it's active. So, storage is an intelligence not dumb and people view storage historically as dumb, so, storage is active, storage is intelligent, storage is a critical element of your infrastructure, both in your private club, but also, for what you do to cut costs, when you do go to public club for certain workloads, and so you need to view storage as a more holistic part of how you handle your data, how you harvest the values of the oceans, okay, if you're going to be fishing, you better make sure you get a lot of fish, if you're going to feed the populous, and the more you do, I think of course, you've got to be all that you protected, and you want to be able to secure everything, you can't do that if storage is just dumb and passive. So, the board of directors, they need to see as data is your life blood, data is your gold, you have to mine that data and storage helps you do that. It's not just a place you stick it. It's not a vault to stick the gold in later. It's helping you mine the gold, refine the gold, get the value out of that gold. How do you do 24 karat versus 18 or versus 14? What do you charge for that? Storage can actually help you do all that analysis. Because it's an active element. >> Peter: What would you say Ed? >> I would agree with everything you said and I would actually play it back to how you started this conversation, which is, you know, that digital business is he who uses his data right. So, I'd probably start there and I used the classic metaphor of your data is oil and he who refines it gets the value of it and I agree it's not a perfect metaphor but it's really about getting insight and leveraging that insight and that does translate to a couple of things, right, so, it does matter that you have it secure but it also matters that you have the right performance either on premises or in the cloud and get the right insights. Typically, the right insights is leveraging the data behind your firewall, which is your proprietary data, which is eighty per cent of data in the world is just not available to a public search engine, it's behind the firewall, and by the way, when you're looking at your business, you might want to combine it with different things, like we talk a lot about our Watson, our ability to do, you know, let's say, your in healthcare and then you could bring up oncology, so, Watson and oncology can help you with your data, or the weather channel, we can bring the weather into a lot of different applications. So, you want to leverage other data sets that are publicly available, but also your private data scenarios and get unique insights to it and you want to work with someone that those insights are actually yours, which is really where IBM differentiates their cloud from everything else, so, you want to bring in AI or cognitive, but we actually have cognitive based upon industry, we've actually trained, the thing between cognitive and AI is actually you have to train cognitive, it actually has to learn. But once it learns, it's able to give you very interesting, you know, insights to your data. We do it by industry, which is a very compelling way to deal with data, and the other thing is, you want to protect your data, either on prem, it's not only protection as far as, if you have a failure or you come back up and running, so, recovery, resiliency, but as much also in security, so, you need to secure it throughout. And then the other thing I'd kind of highlight is, more compliance and everyone doesn't want to talk about compliance but the price of compliance is nothing compared to the price of if you get audited and you have to get compliance back, and prove that, just do it right from day one, and you need to be looking data that you're doing on premises or in the cloud, especially multi-cloud, you need to keep compliance and ownership of the data, because it is a high regulated environment and you're seeing new things coming out in Europe. >> Peter: Absolutely. >> You really need to be on top of it, because the cost of that compliance, it might seem, jeez, that seems like a lot, but it's nothing compared to if you, after a law suit or something, you have to come back from it. That's what I would normally talk to a board about. >> So, Ed, you been back at IBM or at IBM now for a while, it's about a year. >> Sure, yeah. >> About five quarters or so, something like that? >> Four quarters. >> Four quarters. And you've had a chance to look at the assets that IBM has. Now, IBM has obviously been a leader in the tech industry and is going to remain so for a long time. But what will IBM be as a leader in the storage industry? What does leadership mean to IBM? It's kind of the one IBM specific question I'm asking but I think it's important, what is IBM leadership going to be in storage? >> So I think, and maybe it gets to the hypothesis of why I came to IBM, you know, to be honest I think IBM helps people get from where they are to where they want to get to and it helps them do that in what I'll say is risk reduced steps. But very few companies have the breadth of portfolio or capabilities like what we have in cloud and cognitive than IBM. I also think storage as an industry, is going through a major change. It might be the next era is about data, but as far as the storage industry, it's in a lot of changes, so, I think it's a, I use the term big boy game, because it's not about doing the next array which we do, it's as much applying the right analytics and understanding the true flow of data and the right security to do it effectively. When I looked at coming to IBM, I kind of did four things. I think it does play to where our vision is, right. I actually think it is changing and our clients are being disrupted and they are looking for a partner to help them. And it's not just disruption of technology or consolidation or price pressures, but they're being disrupted by these, you know, the Uber of my business is XYZ, it's a verb, so, I keep on saying that, but clients in every industry getting disrupted, so, if they're hesitant, if they are on their heels, they're not able to lean in and technology is the worst thing they could do. So, what they need is a partner that knows, and kind of has the right vision and capabilities to lean forward and with confidence, move forward. IBM has a history of going era to era with clients, that's the first thing, and we calmly do it and clients trust that we know where we're going. And that's a lot to do with our primary research, looking out there. Second thing, I think we have the right vision, the cloud and cognitive vision, no one argues with me, how do you get the insight to your data and that matters. You're definition of a digital business is right on. He who uses their data to their advantage is really a digital business, and is at an advantage by that. Three, it's broad portfolio, so, storage with the broadest portfolio in the industry, and you need that because as we help clients, it's not helping them with the next storage array, it's helping them, here's your business, and it's different for everyone, here's where you want to go to as far as your infrastructure and transformation and I help you get there over time. That takes a broad portfolio, not only in storage, but also overall, the right services, the right software. Analytics becomes a big thing, we're the number one company in analytics and that comes to bear for all our clients, but also have the right services, capabilities going forward. And then, I actually think where IBM storage allows you to lean in is really the biggest thing. We're going to help you simplify so you can lean in, with confidence, because that's what everyone is looking for. A partner to allow you to get there. And very few companies are positioned as well as IBM storage to do that. And I know I'm taking credit for a lot of IBM pieces, but that's a strength, because that's leverage of using an overall company to help you industry by industry, with industry vertical knowledge, really help you lean in, with confidence, so you can grow your business and transform. >> Well, let me build on that, because, at the end of the day, your ability to make these kind of commitments to your customers is a function of your ability to make these commitments to IBM and other IBMers history of keeping the commitments that they make to each other. So, IBM as a culture, and I've been around for a long time, worked with a lot of clients with these things, up and down, good and bad at a product level, but your absolutely right, IBM has a track record of saying here's where we're going, if you want to come with us, we're going to get you there and during periods of significant disruption, that's not a bad type of partner to have. >> I'd use the term people kind of say sometimes it's trust. They trust us to get there, and I think their trust is well placed, again I came from the outside a year ago. We're the last company with primary research, right, and so you have to say, where is it going. We actually do primary research to, there's a reason we've been able to go era to era as a company for a hundred plus years, it's because we actually do that and allow people to go era to era. I know we, sometimes IBM downplays it, I actually think it's a strength. >> Well, the Watson Research Center in many respects is creating the new eras and has for many years and is doing so today too. >> Help clients through those eras without leaving you behind, which is something that's rare, you don't see it, our competitors don't have that and I think that's a big thing. >> Alright, so I'm going to close it here. Ed Walsh, GM of storage at IBM. Eric Herzog, runs product marketing for the storage group at IBM, I want to thank you very much for being part of this CUBE conversation. >> Yeah, thank you. >> As we try to bring the experts that matter and they're going to have a consequential impact on how the industry evolves. Thank you very much for joining us for this Wikibon CUBE conversation. I'm Peter Burris, until we talk again. (upbeat digital music)

>> Announcer: Live from Las Vegas, it's theCUBE. Covering InterConnect 2017. Brought to you by, IBM. >> Hey, welcome back everyone. Live in Las Vegas, the Mandalay Bay. We're at the IBM Interconnect 2017. This is CUBE's exclusive coverage of three days of wall to wall. Day three winding down here at the event. Great show about cloud, data, and blockchain. Our next guest is Marie Wieck, who's the general manager of the Blockchain group within IBM, and Greg Wolfond, who's the chairman and CEO of SecureKey Technologies, announced a partnership with IBM. A lot of great success of blockchain. It's now a business unit in IBM. Marie, great to see you. Congratulations on the new role. >> Absolutely, we're really excited. We've seen so much momentum in blockchain that we really are investing heavily, created a new division, part of our Industry Platforms team, and we're off to the races. >> Exciting. >> So six weeks in the role now. >> Six weeks, I guess the business model is keeping running hard, (laughter) 'cause you guys have made great success. We had Ramesh, one of your workers in your division, on early, he came from the labs, or the research team, >> Marie: Right, research. >> and now he's in Solutions. The traction has been pretty amazing, so take us through, from a business standpoint, obviously you're now got the P&L applet running, you're going, engaging customers on use cases. Where'd this progress come from? Was it just, the internal coalesce of IBMers and customers coming together, give us why this is at its point today. >> I mean I think the most important point about blockchain, is that it really is a network effect. The whole idea of a shared distributed ledger, where everybody has visibility to the appropriate parts of data that they want, gives you some really interesting new business models, but you can't have a network effect, you can't have a community and an ecosystem if you don't have a common set of standards, and a way to drive interoperability. So just 15 months ago, we launched with 30 other people, the Hyperledger Project, in the Linux Foundation. It's been the fastest growing open source project since the Linux Foundation started, so really impressive momentum, and, you know if you think back just a year, at InterConnect last year in February, we had this little demo of trading marbles. This year, fast forward a year, we have a new division, we have 400 clients that we're working with on real production level use cases. We have eight networks in production. We've got now version one of the standard, which really brings a lot of the enterprise requirements, and we're seeing all kinds of new use cases. Supply chain, health care, government, financial services, all where we're really talking about being real now and trusted for business. >> And I would add that Ginni Rometty on stage, hammering home the focus, >> Exactly. >> like big time, at a Watsonesque level, >> Marie: Absolutely. >> so that must to mobilizing the IBMers new division. What's the buzz internally? (laughter) People want to come work for your division now, I mean what's happening? >> I do get an awful lot of emails from a lot of people who are very interested, but I always know when there's real momentum, when there are people who are doing it that we didn't tell to do it, you know, so we're starting with a pretty small team internally, my group itself Direct Line, is about 200 people. There's about 600 people in the extended team across the different functions across IBM, but when I do a search on our internal directory and search for blockchain, there's over a thousand people who have that name already in their title or in their description because they're working on it, and they see the power of it. >> Innovative people get intoxicated by blockchain, because they can just see the disruption elements. Greg, I want to ask you, because you're actually doing it, not only is it intoxicating to kind of grok what blockchain can be, this some real use cases right now, really jamming hard on blockchain with the ledger, can you just share quickly how that's playing out in context IBM and in the marketplace. >> Yeah, so SecureKey's a digital ID company. So we started in Canada years ago doing this login service for government. You show up, you want to see your taxes, your unemployment, your pension, any of 80 different departments, we made it easy for citizens to go there. You can redirect into a federated login with your TD login, or your Royal Bank login. We have millions of Canadians who use that, and we had hundreds of thousands a month, but it's really a login service, and it saved the federal government I think eight hundred million dollars to get that done, but we wanted to move to the next step, which is sharing identity, so digital identity and how do I share my attributes from TD Bank or Royal Bank or my data from Equifax or TransUnion in a trusted way with parties I want to, and not share it in other ways. And we couldn't do that without Hyperledger. So we can talk a little bit about why we went to it, but we have a network in Canada, we tested already phase one, we're launching later this year with Royal Bank, TD Bank, Bank of Montreal, Scotia. Where a citizen can show up at a Telco to create a new account. Is it okay to share my name and address and my credit score? Yes, done, account's open in seconds. FINTRAC changed the rules in Canada so you can open a bank account. Can I show up at a bank and share my attributes from the province and from a credit agency, and create my bank account in seconds. And we've all had this problem, right? I talk to my wife... >> I mean we live it everyday, I mean identity theft is I think front and center in mainstream life. Everyone has either someone close to them or themselves get the phone call, the credit score's dropping, or hey, someone's had my identity for a couple weeks, this is brutal, even the credit cards are gettin'... >> It's funny, when I started this business two of my friends had their identity taken over and someone put mortgages on their homes, and I said there had to be a better way to do it. With blockchain if we can take data from different sources, that the bank knows it's me and I can log in right now, that I possess this phone, that the province knows it's me and I can turn on the camera and check it's me, we can raise the ID validation score for everyone in the whole industry. For healthcare, to government, to banking, and we not only raise the ID validation we also raise the AuthScore, because I'm not just logging in with my bank, I must have this phone, with this SIM in it, and if it's canceled it's not me. And normally people would put that through brokers in the middle, but NIST in the U.S. said, we don't want brokers in the middle. They could peek, they could see your data. I have single points of failure. If this is identity for health here's how it goes down. I have honeypots of data. People are collecting all of my stuff in one place, it's encrypted, but the bad guy's going to get that, right? They could go after the person, and say I need the keys, I have a member of your family... >> I mean we're living in a world, in cloud, Marie knows, there's no perimeter anymore. >> Marie: Right right. The security experts that are state of the art right now, are saying, even saying theCUBE in day one here, data is the new perimeter. So there it is, right, this is fundamental, what you're saying, this is the new perimeter, the data, and you distribute it. >> So no broker right, means less of a threat matrix for people to hack. You don't need a trusted third party to arbitrate. >> You shouldn't have to get other credentials and things to go right, if I can login at my bank right now` and prove I've got the mobile device, can I release data from different sources? Ten percent of Americans move every year, if I show up at an apartment, can I share that I'm Greg and my bank says I'm me, that I have this device from my mobile company, can I share a background check to say that it's me? We're going to do that in about eight seconds, compared to the landlord having to go and pay a real estate agent one month's rent to vet you. And then when you do that, imagine the power now right? Would you like to sign up for internet? Share your data, yes, click. Would you like contents insurance, click. Totally taking friction out for consumers, but making sure that the parties who provide that data, whether it's my bank, whether it's my government, they can't track me. I don't want my government or my bank knowing if I go to mental health, or if I go to a cancer clinic. Really important that they don't know, right? >> Yeah, healthcare here, I don't know what it's like in Canada, but certainly in the United States you can't get information about yourself (laughter). >> And it's a perfect connection to blockchain, 'cause the whole notion of blockchain in our mind is about a trusted network, and how do you get trust if you don't know who the people are who are participating. So, we signed an agreement with the Food and Drug Administration in the United States, to focus on leveraging blockchain for exchange of information around patients, privately and securely for clinical drug trials. You know, it's just one example of now, you bring that trust element, that's built on a blockchain already, as a new interoperable component of these new supply chain networks. Whether it's around supply chain in global sourcing, whether it's the providence of food or diamonds, there's some really interesting aspects that you can now add on top. And we're now even connecting, you mentioned Cognitive, you know, now apply Watson on top of that. How do you increase the trust level in our new version one delivery of Hyperledger on the IBM cloud, we actually provide a trust score for the network, scale, a one to a hundred. What if Watson could actually look at your use case and hear the recommendations and suggestions for how to improve the trust level? Improving it means getting more members, so it's more distributed, and there's more sharing of information. But they're not going to want to share that information if there isn't a trust model. >> So give us a glimpse as to, sort of, your business. You got 200 people, but you've got thousands of people within IBM that you can tap, in addition to the huge portfolio of things like Cognitive. So you've got this startup (laughs), >> Marie: Right. >> inside of IBM. >> Marie: A startup in IBM. >> And you said it's inside the Industry Platform's team, so what is that, and what are you actually building out? >> So, we are building, we're taking, and contributing, we're investing really, in the Hyperledger project ourselves. We are one of now 122 members of the open source and open community project, and we're actually developing and contributing content there. >> Dave: Big committer there. >> Big committer, and we provide a support model for anybody who wants to use just Hyperledger, but we take Hyperledger back, and now we're delivering it as a secure platform on our high security network, that is production grade, you know enterprise strong, would be Ginni's word for that, right, and delivering that on our cloud, or letting you take a container and put it on your own enterprise if you really want your own private cloud. But we're also building industry solutions on top of that. So we announced a partnership with Maersk, for global shipping on global trade digitization to provide greater visibility. >> But on that deal, just to interrupt, that Ramesh was put in, that wasn't a solution specifically for them, that was an industry scope solution. >> Correct. So it's really a partnership. So in this case again, it's that network effect, it's that ecosystem, it's not Maersk, the customer, it's Maersk and IBM the partners, who are now bringing forward as the anchor tenants in this new network, the rest of our ecosystems, and we were interested 'cause we have a big supply chain business for all our hardware as well. >> And you're selling a SAS product, is that right? >> Correct. >> So it's a subscription based model? >> Correct. >> And then services on top of that? >> And services both to develop new blockchain applications, we've had a number of our clients here from the 20 thousand at InterConnect, that've come up with new ideas. We're going to help them build that, in a services kind of model, but many of these are going to be essentially SAS networks where either they're going to pay a membership fee or they're going to pay per transaction, a percentage of the price, or they're going to participate in the savings, because this is actually going to streamline the opportunity. In the case of SecureKey, the model we see customers willing to buy, the validation of an identity for an individual if they're participating in a critical transaction. A bank would certainly be willing to pay to increase the confidence that Greg is Greg, if he was applying for a mortgage online. >> And the consumption is through the IBM cloud, correct? >> Yeah, so there's a toolkit, we're big believers in open source. It's open at the ends, really easy using things like Bluemix to connect to the endpoints. And for us, it's just a magnificent coming together, because things like the high security network to turn banks on quickly, where they trust it, and they can put their data in a secure and trusted way, make this all go faster. >> Dave: But that's the only place in the world I can get this, correct? >> Marie: It is certainly the only place that you can get that level of security in a blockchain network. >> But from a competitive standpoint, somebody else has to build this out, and create as a competitive product as IBM has, and run it on somebody else's cloud, for them to compete, correct? >> That is correct. >> The strategy is not to spam the world's clouds, it's to say hey, we've got this solution, here's how you get it, here's how you consume it. >> And we really firmly believe that if this is an interoperable set of standards, there will be other networks, there will be other participants. We want them all to be interoperable. We want a global identity standard for interlocking networks, because that is actually the tide that raises all boats. So if they want to take Hyperledger and put it on their own private cloud or somebody else's cloud, we support that thoroughly. We think that the most enterprise grade cloud though, is with IBM. >> You just got thousands of people doing it, and you say, go for it. >> Exactly. >> Dave: Bring it on baby! >> First of all, you had me at blockchain beginning the interview. I love blockchain, and I think it's very intoxicating from a disruption standpoint. Any entrepreneur, any innovator... This is a bulldozer on existing business models, and of how people do things. So, I'm sure the organic growth that you guys see is proving it, internal IBM and external. How do people get involved? What's your plans on building the ecosystem now, because you got a tiger by the tail here as the GM of this division now. You got to run hard, you got to embrace people, you got to have events, what's your plan, and how do I get involved if I'm someone watching and we want to get involved? >> So, great simple ways to get involved, the developers, we want 'em to be involved directly through the cloud and through developerWorks. You get free access, you can get started quickly. In three clicks you can have a four peer Hyperledger network up and running on Bluemix, and you can start your own services and create. If you are a customer, what we're really suggesting is come and bring us your use case. Bring the participants in your network as well. Come into one of our IBM garages, and we'll work that out for you. And I think it's important that, we think blockchain has a huge potential or I wouldn't be in this new role, but we also think it's not for everything. It's not the panacea for every business problem. We want to make sure the people are using it in the right way for areas where it really makes the most impact, and then we'll help you implement that and develop it. And then we really see the whole ecosystem around our partners, you're going to onboard people into a blockchain network. You're going to have to integrate with your back ends. You're going to extend your mobile devices to provide these new services through apps. So our GSI community is really helping with the integration and the onboarding. Our ISVs are developing new services that run on those blockchain networks, and we just launched our new IBM Cloud for Financial Services, has a blockchain zone, for all those fintech startups to get access and reuse components, so that we can accelerate the effect. >> Alright, well, congratulations Marie, great to see you in the new role, congratulations, >> Marie: Thank you. >> We're super excited for you, and looking forward to getting the update soon at our new studio. We'll try to rope you into our new Palo Alto studio. Greg, great to hear your success. This is the nirvana, I mean, secure ID is like, the big, I mean easily, not like with some either token or engineered identity system, and this is a home run. >> It's privacy, and it's as we talked about before the broadcast. Facebook, would you trust Facebook to go see your medical records? Would you unlock your title using Facebook? You want things that are private, where people aren't tracking you and are more secure than that, so this is really... >> Don Tapscott called Facebook data fracker. (laughing) We provide all our data for Facebook, they've got billionaires on it. Thanks so much for spending the time. >> Thank you. >> Blockchain revolution here inside theCUBE, bringing you really trusted content here on theCUBE. Distribute it out around the world, I'm John Furrier, Dave Vellante, thanks for watching. More great coverage coming up here, stay with us.